CoinDesk reported:
The European Union on Thursday confirmed its decision to raise tariffs on imported electric cars from China, prompting a new warning from an automaker that it may have to hike prices as a result. The EU executive body, the European Commission, concluded in an investigation that Chinese battery electric vehicle producers benefit from “unfair” subsidies, leading to the announcement of such tariff plans in June. On Thursday, European regulatory authorities confirmed these tariffs will take effect on Friday, adjusted slightly to range from 17.4% to 37.6%. These duties will impact automakers from Chinese giants like BYD to European brands potentially producing cars in China, and even American giant Tesla, which has factories in Shanghai.
As China’s automakers aggressively expand into Europe with competitive pricing, posing a threat to top automakers in the region, many of whom lag in electric vehicles, the EU’s decision comes at a critical time. The European Commission alleges these automakers benefit from “unfair subsidies”. Automakers have already responded to the tariffs. On Thursday, Chinese electric car maker Nio stated it is currently maintaining prices for its cars sold in Europe but added, “We cannot rule out the possibility of price adjustments later due to these tariffs.” Another Chinese electric car newcomer, Xpeng, said on Thursday that customers awaiting delivery or placing new orders before the tariffs take effect will “be shielded from any price hikes”. The company did not comment on whether it would raise prices due to the tariffs. Geely declined to comment when CNBC reached out after the EU first announced tariffs last month. Tesla indicated it might raise prices for its Model 3 cars in Europe, though the EU has not specified the exact tariff level Tesla could face, noting last month the American automaker “could receive separate calculations of tariffs”.
EU-China Negotiations
The tariffs, effective from Friday, are temporary and will last for four months. During this period, EU member states must vote on the so-called “final duties” which would last for five years.
China and EU officials have held several rounds of meetings to discuss tariff issues, with Beijing criticizing the EU’s tariff imposition in June as “protectionist behavior”. Chinese Ministry of Commerce spokesperson He Yadong said on Thursday he hoped both sides “move towards each other, show sincerity, accelerate the negotiation process, and reach a solution acceptable to both sides based on rules and reality”.
Commitment of Chinese Electric Vehicle Manufacturers to Europe
Chinese electric vehicle manufacturers reiterated their commitment to the European market, where they have been expanding over the past few years. Xpeng stated it is “committed to providing high-quality innovative products to a growing customer base in Europe and making long-term commitments to these markets”. The company added it is “actively evaluating the feasibility of establishing local manufacturing capabilities in Europe”. Currently, all Xpeng cars are manufactured in China. A European factory could help offset some tariffs. BYD, one of China’s and the world’s largest electric vehicle manufacturers, announced plans last year to open its first European factory in Hungary but did not specify a timeline. Meanwhile, Nio on Thursday said it is “fully committed to the European market: We believe in promoting competition and consumer interests, and we hope to reach a resolution with the EU before implementing final measures in November 2024.”
